13. Father owned 20 shares( with a basis of $1,000per share), Son owned 10 shares, and strangerowned 70 shares in FSS, Inc. Corporation E&P is$100,000. Corporation redeemed 15 of father'sshares for $45,000. Discuss tax consequences tofather.14. Dead Corporation, a C corporation, fullyliquidates and distributes its sole asset, land (fmv$50,000, basis $20,000) to its sole shareholderIma Dye (basis $10,000 in stock). Discuss the taxconsequences to the corporation and theshareholder.

NOTE : As per BARTLEBY guidelines, when multiple independent questions are given in question, then…

13. Father owned 20 shares( with a basis of $1,000 per share), Son owned 10 shares, and stranger owned 70 shares in FSS, Inc. Corporation E&P is $100,000. Corporation redeemed 15 of father's shares for $45,000. Discuss tax consequences to father.

13. Father owned 20 shares( with a basis of $1,000 per share), Son owned 10 shares, and stranger owned 70 shares in FSS, Inc. Corporation E&P is $100,000. Corporation redeemed 15 of father's shares for $45,000. Discuss tax consequences to father.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: K sold 1,000 shares of a public company for $8,000. Before the sale, K owned 5,000 shares; an…

A: Income tax expenses relate to the amount of plutocrat a business or existent anticipates paying…

Q: 4. During the year Jungkook had employment income of $30,000, property income of $1,000, a business…

A: The objective of the question is to calculate Jungkook's net income for tax purposes based on the…

Q: Scenario - John Haddock owns 75 percent of Haddock Corporation. The other 25 percent of the stock is…

A: Tax Return - It is a form on which a taxpayer declared its annual statement of income and various…

Q: Four unrelated shareholders own Benton Corporation's 400 shares of outstanding stock. As indicated…

A: It is the change in material amount of the assets or securities recorded at their initial cost. The…

Q: 10.Sam and Devon agree to go into business together selling college-licensed clothing. According to…

A: In this case, the applicable section is Section 351 as Sam will get 80 percent of the stock in the…

Q: A. Bob Loblaw and Steve Holt get together to form a new corporation. They each own 50% of the stock.…

A: Corporation:It is usually a group of people or a companyauthorized by the state to act as a single…

Q: In November of the current year, Emerald Corporation declared a dividend of $2 per share (the…

A: In order of not getting taxable as ordinary income the one who buys shares should meet the holding…

Q: Helen owns 12% of the stock of the Median Corporation. If Median makes a dividend payment of…

A: Calculate the total value of Helen's ownership:Multiply Helen's ownership percentage by the total…

Q: Required information [The following information applies to the questions displayed below.] Tiny and…

A: Dividend income is the income distributed by the company of the free reserve available with them.

Q: orporation is owned 20% by individual A and 80% by corporation B. Grocery Corporation has earnings…

A: Tax-Effected means the amount of an expense or cost calculated on an after-tax basis to the extent…

Q: Capital Gains Tax. Joel purchased 100 shares of stock for $29 per share. During the year, he…

A: Capital gain refers to the excess of the sale price over the purchase price of an asset. Capital…

Q: A owns ABC, Inc., an S corporation. A's stock basis was $10,000 at the beginning of year 1 and he…

A: To determine the amount of loss that A can deduct in year 1, we need to consider the stock basis and…

Q: Bill, Mary, and Joe are 1/3 partners in an unincorporated business. They are each married and each…

A: The qualified business deduction for each partner can be calculated as follows: Step 1: Determine…

Q: Mr. Lion, who is in the 37 percent tax bracket, is the sole shareholder of Toto, Inc., which…

A: As per the given information: Average annual net profit (before deduction of Mr. Lion's salary) =…

Q: 4. During the year Jungkook had employment income of $30,000, property income of $1,000, a business…

A: The objective of the question is to calculate Jungkook's net income for tax purposes based on the…

Q: Sam and Devon agree to go into business together selling college-licensed clothing. According to the…

A: It has been assumed that Devon has received 25 percent of the stock in the corporation in return for…

Q: Ku Jung owns all of the shares of Jay Ltd. The ACB of the shares is $5,000. He has decided to…

A: As per 88(2) states that where it does apply, a dividend paid on a winding-up will not be a taxable…

Q: Sam and Devon agree to go into business together selling college-licensed clothing. According to the…

A: As per TCJA, Non-taxable transaction under Section 351 (i.e., no gain or loss is recognized) ,only…

Q: Taxpayer T ("T") owned a passive investment which generated a $12,000 loss during the year. In…

A: djusted Gross Income (AGI) is a taxpayer's total income from all sources, minus certain allowable…

Q: (3) Brown transfers Blackacre to XYZ Corp., a newly formed corporation, in exchange for 140 shares…

A: Tax consequences for Exchange of Shares A number of variables, such as the type of shares involved,…

Q: Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return…

A: As per TCJA, Non-taxable transaction under Section 351 (i.e., no gain or loss is recognized) (only…

Q: Jay owns 100% of Kaye Company. Jay (an individual) is in the 37% tax bracket. Assume that Kaye…

A: Solution:- Calculation of the tax must Jay pay on this $50,000 dividend as follows:- Introduction:-…

Q: er several years of profitable operations, Javell, the sole shareholder of JBD Incorporated, a C…

A: Dividend -Companies may give their shareholders financial payments, known as dividends. It is a…

Q: On January 3, Year 4, Taylor and Barr each owned 100 shares of the 200 issued shares of Lan stock.…

A: It has been assumed that equity method has been followed. In equity method, any ordinary income…

Q: What is Devon’s tax basis in the stock he receives in return for his contribution of services to the…

A: Solution:- Given, Contributed Inventory value = $100,000 in return for 80% of the stock Sam's tax…

Q: Tall Corporation (an S-corporation) has AAA of $16,000 and AEP of $8,000 .Tall Corp. distributes…

A: The basis is the cost to the person for the stock.

Q: Hawkeye Company reports current E&P of $300,000 this year and accumulated E&P at the beginning of…

A: The tax basis of an asset is its cost basis at the time it is sold. The cost basis calculation…

Question

13. Father owned 20 shares( with a basis of $1,000
per share), Son owned 10 shares, and stranger
owned 70 shares in FSS, Inc. Corporation E&P is
$100,000. Corporation redeemed 15 of father's
shares for $45,000. Discuss tax consequences to
father.
14. Dead Corporation, a C corporation, fully
liquidates and distributes its sole asset, land (fmv
$50,000, basis $20,000) to its sole shareholder
Ima Dye (basis $10,000 in stock). Discuss the tax
consequences to the corporation and the
shareholder.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

4. During the year Jungkook had employment income of $30,000, property income of $1,000, a business loss of $2,000, income from an RRSP withdrawal of $2,000, and a capital gain of $30,000 on the sale of shares in a small business corporation. How much is Jungkook's net income for tax purposes in accordance with Section 3 of the Income Tax Act? S.3(a) Employment Property Other - RRSP S.3(b) S.3(c) S.3(d) Business loss Net Income for Tax Purposes: $30,000 1,000 2,000 15,000 -2,000 $46,000
T corporation (E & P $800,000) has 1,000 shares of stock outstanding. The shares are owned as followed: James 600 shares; Stephanie (James's sister) 300 shares; Luke (James son) 100 shares. T corporation owns land (basis of 300,000, FMV of $260,000) that it purchased as an investment years ago. James had a basis of $275,000 in his shares. What are the tax consequences for both T corporation and James if the distribution is: A. A qualified stock redemption B. A liquidating distribution
.
K sold 3,000 shares of a public company for $12,000. Before the sale, K owned 10,000 shares; an initial 4,000 were purchased for $4,000 and an additional 6,000 were purchased for $18,000 twenty days before the sale. What amount is to be reported in net income for tax purposes?
Please answer
Carl contributes equipment with a $50,000 adjusted basis and an $80,000 FMV to cook Corporation for 50 of its 100 shares of stock. His son Carl Jr. contributes $20,000 cash for the remaining 50 Cook shares. What tax issues regarding the exchanges should carl and his so consider?
tyu
Moore Corporation has 400 shares of stock outstanding that are owned equally by four unrelated shareholders. Moore redeems 100 shares from the shareholders as shown below for $600 per share. Each shareholder has a $180 per share basis for his stock. Moore Corporation's current and accumulated E&P at the end of the tax year is $150,000. what are the tax consequences of these redemptions?
nit.5
Hh1. Account
What are the tax consequences to Paul?
18. Ron and Hermione formed Wizard Corporation on January 2. Ron contributed cash of $200,000 in return for 50 percent of the corporation’s stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation’s stock: (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) FMV Adjusted Tax Basis Building $ 75,000 $ 20,000 Land 175,000 80,000 Total $ 250,000 $ 100,000 To equalize the exchange, Wizard Corporation paid Hermione $50,000 in addition to her stock. What is Hermione’s tax basis in the stock she receives in return for her contribution of property to the corporation?